Problems of Economy in Russia and Countries in Eurozone

First month in 2015 has passed. Still, the circumstance of economy has not been well. Russia and countries in eurozone are still trying to revive the economy of their country.

The chaos of Russia’s economy had caused the international credit rating agency, Standard and Poor’s (S&P), to downgrade the credit rating of the country into BB+ or below the investment grade. This was the first time in last decade, the credit rating of Russia stayed at the below investment grade. Russia is not only country to stay at the credit rating nowadays. There are also Indonesia, Bulgaria, and Turkey in the category. The impacts of a country’s credit rating below the investment grade are bad image to the foreign investors and borrowing cost hikes. Thus, if central government of Indonesia cannot raise the credit rating of Indonesia, It can be an obstacle to achieve economy growth target in 2015 at 5.7%.

Meanwhile, prices in the eurozone declined 0.6 percent in January compared to the prices level previous year. The main contributor of deflation was the falling price of oil. Global oil price has decreased to 60 percent since the middle of a year ago, and it is likely the price of global oil will remain below USD 50 until first semester of 2015. To against this situation, European Central Bank (ECB) will impose quantitative easing programme to push prices upwards once again. Through quantitative easing programme, ECB aims to inject about 1 trillion euros to the economy. Hopefully, this programme is able to spark the increase of the amount of Indonesia’s export to the countries in eurozone, so that Indonesia’s economy can grow sharply and reach 5.7% in 2015.

The circumstance of economy in several countries is not well at the moment. Some countries have a problem with the credit rating, whilst some of them are facing the problem of deflation. In sophisticated world like today, the economy problems in a country can give bad influence to other countries because all countries have connected well nowadays. These problems had been counted by IMF and World Bank in which those organizations had lowered the global economic growth forecast in 2015. Nonetheless, all countries keep trying the best to revive their economy.